ur Channel ReadWriteBiz, sponsored by Yola.com, is a resource and guide for small businesses. Yola.com is an award winning website builder that makes it easy for small businesses to create a website. With Yola's professional templates and easy-to-use tools, you can make a website that helps you stand out from the competition.
Several recent stories in The New York Times have highlighted suspicious SEO practices - "the dirty little secrets of search," as it titled its most recent expose. In response, ReadWriteWeb's John Paul Titlow wrote last week "Why You Should Avoid Black Hat SEO Link Schemes At All Costs." And indeed, you should.
But what if your site is labeled as spam (fairly or not)? What, if anything, can you do if your website has been penalized by Google?
Google Search engineer Matt Cutts has posted his advice in a YouTube video that addresses how penalties against your site can be lifted.
Cutts explains the difference between manual and algorithmic penalties. The former is a response to reports submitted to Google - sites flagged as spam or off-topic porn. But that data is also utilized to help Google engineers improve the search algorithm, in the form of classifiers for things like content spam and keyword stuffing.
By and large, if your site has been flagged via an algorithm penalty, once you change your website (moving the infringing aspects) and the site is recrawled, you should be okay. Your rankings should increase.
Cutts describes manual flags as "time outs." These penalties last for a certain length of time - the length depending on the severity of your infraction - but eventually these expire and your site should be able to improve its ranking again.
You can file a reconsideration request, which should help expedite the removal of a manual penalty. But this won't help if it's a matter of you making the necessary changes on your website.
When are penalties lifted? 
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